The Hidden Costs of China's Shift to Hydropower

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As outlined in China’s national climate plan, submitted to the United Nations last month, the country’s aim to peak greenhouse gas emissions by 2030 or sooner will rely heavily on a shift from coal to use of non-fossil fuels. To many, that would seem a clear win for the environment in coastal megacities and mining areas, where air, water and soil pollution are a potent toxic legacy of China’s long-term addiction to fossil coal.

But China’s target to use non-fossil fuel sources for around 20 percent of its primary energy consumption by 2030 will likely prompt a fresh round of dam building in ecologically fragile Tibetan regions of China, particularly in impoverished western areas.

Hydropower is responsible for far fewer greenhouse gas emissions than coal. But shifting away from coal in favor of water-driven electricity entails major risks. These include the low generating efficiency of hydropower, heightening the need for back-up coal power during sustained periods of low rainfall, weak grid systems and potential for large dams on international rivers to spark conflict with neighboring countries.

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Hydropower – a green savior?

Hydropower is China’s second-largest energy source after coal and the country’s installed hydropower capacity is set to rise to 350 gigawatts (GW) by 2020, up from 300 GW today. The country is already home to half the world’s 80,000 dams, more than the United States, Brazil, and Canada combined.

Chinese authorities hope that a large-scale rollout of hydropower can help reduce toxic smog that has triggered public outrage and health scares both at home and abroad. Hydropower has already helped slow growth in China’s greenhouse gas emissions, some experts claim. China’s coal use fell by nearly 8 percent in the first four months of this year – in part, says Greenpeace, due to power fed into the grid by hydro plants since brought online.

“Hydropower is one of the main ways for the power sector to replace fossil fuels, save energy and reduce emissions,” points out Zhang Boting, deputy secretary general of the China Society for Hydropower Engineering.

China is already the largest dam builder in the world, but its vast hydropower resources are underdeveloped compared with its potential, meaning the country is overwhelmingly reliant on coal, says Zhang. If China exploited its remaining hydropower resources it could meet a fifth of China’s peak energy demand and displace about 1.3 billion tonnes of coal, he adds.

The most enthusiastic advocates of new dams in China say the country can almost double its current hydropower capacity to 540 GW by 2050.

High price for clean air

Replacing coal with hydropower may lead to cleaner air for citizens on the east coast, but there will be a high environmental price to pay for people who live in the more remote and ecologically fragile south-west, where at least 80 percent of the new dams will be built. Chinese environmentalists have called for an urgent halt to large hydro projects, pointing out that the country’s dash for dams has already destroyed river ecosystems, fish habitats and raised fears about safety in earthquake-prone regions.

The concentration of dams will be particularly dense on the Jinsha (upper Yangtze) River, where cascades equal to five times the 22.5 GW capacity of the Three Gorges dam are proposed. These dams will not only hold back water flow but also silt, heightening risk of major subsidence in the Yangtze delta and floods around major cities such as Shanghai.

Other cascades will pack China’s last free-flowing international rivers – such as the Mekong and Brahmaputra – which will stem water flow and could spark tensions with India and Southeast Asian countries downstream.

Skepticism

Many experts are skeptical that more hydropower means less coal. “Hydropower will never completely replace thermal power,” argues Fan Xiao, geologist and chief engineer at the Sichuan Geology and Mineral Bureau.

So-called ‘green’ hydropower is in fact spurring the construction of new coal-powered plants in the south-west, says Fan. “Because the seasonal flow of rivers affects hydropower, some areas have built more thermal power to solve the problem of peak energy load.”

There is anecdotal evidence that for every new hydropower dam built in the south-west, an additional coal-fired power plant is also constructed, often as back up.

Guizhou province has built more coal-fired generating capacity than hydropower to ensure a stable supply of power in the dry season. Sichuan, Guangxi and Yunnan are doing the same.

Waste and inefficiency

China’s installed capacity in hydro is impressive, but its contribution to the country’s overall energy mix is far more modest. Due to rushed construction and other industry problems, Chinese dams are highly inefficient, with an average capacity factor of 31 percent – about two-thirds the world average. Capacity factor refers to the amount of electricity produced compared to the installed capacity

And since the bulk of new hydropower plants will be built in remote mountainous regions of the south-west, electricity has to be transferred vast distances to manufacturing hubs of southern China – meaning a lot of electricity is lost along the way.

China could be losing enough hydroelectricity to power the U.K. and Germany for a year as a result of poor planning and weak grid infrastructure, Reuters recently reported

Meanwhile hydropower development has further spurred energy-hungry and polluting industries, as provincial governments try to absorb the extra electricity generated in remote areas. One example is the Lijiang aluminum refinery, which is close to one of China’s top tourist destinations in Yunnan.

In addition, extreme weather caused by climate change may mean generating power from unpredictable river flow becomes increasingly unviable in the future. In 2011, extreme drought caused hydropower output in Yunnan to drop by half; more than 1,000 dams in central China were forced to suspend operations.

2050 roadmap

But despite the high financial and environmental costs, hydropower will play an essential role in any low carbon future, argues Darrin Magee, a U.S. academic and energy specialist who has been working with the Rocky Mountain Institute, Lawrence Berkeley National Labs, and the Chinese government think-tank, Energy Resource Institute (ERI), to explore the future of renewable energy.

The radical 2050 roadmap – published in April this year – predicts China could get almost 86 percent of power generation from renewable energy by 2050. ERI sits in China’s National Reform and Development Commission, the country’s powerful planning ministry, and is responsible for drawing up energy strategy in the 13th Five-Year Plan (2016-2020). The ERI’s views often carry a great deal of weight in policymaking circles.

In a well-managed grid system, hydropower can replace coal by providing a baseload power and smooth out vagaries of the sun and wind – since these plants would be able to be switched on and off in a matter of minutes, Magee explains.

The hardware already exists, although is only gradually being rolled out. The three ultra high voltage direct current (UHV-DC) lines under construction in China will be capable of transmitting power over long distances more safely and with less loss of power.

These new lines will also enhance the ability of hydropower to interconnect with solar and wind stations. The world’s largest solar-hydro hybrid station ­recently connected to the grid at Longyangxia on the Tibetan plateau is a sign of things to come.

And if renewables and hydropower are to displace coal, smart grid technology will have to be deployed to curb surges in demand and avoid the need to run extra coal plants. China’s State Grid Corporation aims to have a nationwide smart grid by 2020 – which will allow real-time electricity prices to be transmitted to homes and factories and encourage greater efficiency.

There are still some major hurdles, however. The rules to get renewables onto the grid and bring predictability to how dam operators will dispatch electricity haven’t yet been enacted.

“The biggest challenge right now is that the dispatch and operation rules remain very opaque,” Magee says. “Currently rapid releases of water in dam reservoirs to meet poorly predicted peak loads lead to landslides and erosion around reservoirs and negative impacts downstream,” he adds.

China’s power grid system is in desperate need of a major overhaul, but making the necessary changes remains a tough slog. The central government’s efforts to break down the current monopoly practices, hive off grid company revenues from the sale of power, and a move to force grid companies to prioritize renewables over coal and their own assets have dragged on since the 1990s.

More efficiency, less power

In the long term, encouraging consumers, factories and cities to consume less electricity could render new dams obsolete. For example, an ERI study estimates that replacing incandescent bulbs with more efficient LED lighting by 2020 alone could save as much electricity every year as the Three Gorges Dam produces.

Chinese policymakers are beginning to realize the potential of switching to energy-efficient light bulbs on an industrial scale, Magee points out in a recent paper published in the Copenhagen Journal of Asian Studies

Improving the efficiency of pumps and fans across the industrial sector could reduce electricity use by 20 percent, equivalent to the amount of hydroelectricity produced by all of China’s powered-up dams in 2013, the paper estimates. Pumps and fans matter, since they are estimated to consume half the world’s industrial demand for electricity.

A number of major hurdles remain. First is the question of who pays for the upfront costs of efficiency upgrades. One idea is to allow companies to sell the electricity they have saved through efficiency measures back to the energy market.

Second, excessively cheap energy and electricity prices in China means consumers are less frugal. Weak prices also deprive utilities of the necessary revenues to plough back into energy efficiency measures.

That means that if power suppliers have too little impetus to compete on price and efficiency, China will end up adding more expensive and environmentally destructive hydropower projects to an ever wasteful and dysfunctional grid system.

Beth Walker is chinadialogue’s culture editor and editor of thethirdpole.net. Liu Qin is editor in chinadialogue’s Beijing office.

This article was originally published by chinadialogue and appears with kind permission.

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